Inflation: Why Investing in Yellow Could Save Your Portfolio

On TV, you have to boil down answers into the shortest, most concise sound bites. Right now, my favorite sound bite is "Invest in Yellow: Corn, Wheat and Gold". Some people might be scratching their heads and questioning why this is sound money advice.

First of all, gold has outperformed other investments year over year. People that were invested in gold did not get creamed during the stock market dip. No, they profited. Gold continues its upward trend, and I'm still buying. Gold is a historical safe-haven during times of crisis. People who have gold and gold investments can hang onto their savings when their currency falls flat - something that I am predicting will happen to the U.S. Dollar and U.S. Government Bond market. While dollars go down in value, gold goes up.

As for corn and wheat... people need to eat. They don't need plasma TV's or that little kitchen gadget that helps you stir peanut butter without making a mess. The population in India and especially China are growing faster than their food supply can handle. What does this mean? American farmers will thrive because the demand of agriculture products will continue to escalate. Prices on corn and wheat will rise, and investments in those areas will flourish. Agriculture commodities are dirt cheap right now, so get them while they are still on sale.

I also like white by the way... specifically silver and sugar. I really love silver right now. It's still cheap and I wouldn't be surprised if it went up to $20/ounce this year.

Please enjoy the following video I shot DIY-style to explain the basics about inflation.

Comments

[ThirdPartyTime]

For crying out loud. Is she syuck in 1950? Nothing is based on gold prices anymore, and as such the value of gold will drop just like everything else when demand for commodities drops. More importantly, gold is "so 80's" as my nephew would say. People don't need gold, people don't want gold, people don't use gold anymore. I certainly hope she is banned from giving investment advice on this site from here going forward. Good grief!

[DuganS1]

Gold is not a commodity. It's a precious metal. Demand for commodities has already dropped. Didn't you notice that oil went from $149 a barrel to $31 a barrel? Consumer demand for gold is primarily in India, however, it's Investor demand that drives the price and right now that demand is extremely high.

[WorkingClass]

People don't want gold? Why are they paying $900.00 per ounce for something they don't want?

[KillTheMessenger]

Thanks, I will pass on all three. FDIC insured cash is good enough for me.

[DuganS1]

That is a poor investment strategy. You should at least be in TIPs or insured muni's.

[dadw5boys]

copper and iron.

[TheMadHedgeFundTrader]

Gold soared $60 in two days, touching $952 an ounce. Last year, South Africa suffered its steepest decline in gold production since 1901, falling 14%, to a mere 232 tons. It now ranks only third in global production of the yellow metal, after China and the US. Severe electricity rationing, a shortage of skilled workers, and more stringent mine safety regulations have been blamed. Choked off credit has frozen the development of new capital intensive deep mines, as it has for everybody else. Rising production costs have driven the global break even cost of new gold production up to $500 an ounce. In the meantime, the financial crisis has driven flight to safety demand for gold bars and coins to all time highs. Last year, the US Treasury ran out of one ounce $50 American Gold Eagle coins. Competitive devaluations by almost every central bank, except Japan, mean that currencies are not performing as the hedge that many had hoped. It all has the makings of a serious gold shortage for the future. Could the downturn we have seen over the past ten months be just a blip in the eight year bull market? When the last hedge fund is forced to sell its last leveraged long position, watch out above!

[dadw5boys]

DID YOU EVER CONSIDER THEY WERE HOLDING GOLD OFF THE MARKET AND SELLING IT PRIVATELY. ???????

[KillTheMessenger]

Got any proof?

[sd4david]

I like silver better than gold. Silver is about 35% below its high of last year. Gold is only 5-10% below its high. Gold is near its all time high, while silver, at around$14/ounce is below its all time high of $50. Of course this was due to market manipulation in the 1980's by the Hunt brothers.